A year of the Panama Papers

Monday, 1 May 2017, 10:51Last update: about 12 months ago

A week may very well be a long time in politics, but the last year of the Panama Papers seems like an eternity. Here is an abridged refresher on all that has happened over the last year of what has arguably been the worst, and longest-lasting, scandal in Maltese politics

22 February 2016 – Journalist Daphne Caruana Galizia posted the first major hint that the biggest scandal in Maltese history was about to break. “It’s traditional to eat lamb on Easter Sunday, so Konrad Mizzi and his estranged wife Sai Mizzi Liang will be getting theirs from New Zealand, courtesy of their fixer Brian Tonna, who has a desk at the Auberge de Castille”.

24 February 2016 – Minister Konrad Mizzi went to MaltaToday and revealed the existence of his New Zealand Trust, and a “shell company,” but failed to give a hint of the company’s location – Panama. The newspaper reported: “Energy minister Konrad Mizzi has announced the existence of a family trust that he registered in New Zealand, which he says he will be submitting to Parliament in his declaration of assets.” Minister Mizzi said that the trust was set up in 2015. “I have always been and will always be transparent regarding the state of my financial affairs,” Mizzi said. “Due to the ongoing pressures of work and long hours I do not have time to manage my financial affairs effectively.”

The minister told the newspaper that in 2014 he and his wife Sai Mizzi had sought advice on asset management and that a trust was opened. “This will protect our assets and ensures we realise a fair rate of return. Our assets will be managed by a professional set-up and trustees. My wife and I will not be personally involved in managing this set-up and the beneficiaries of the trust are me, my wife and my children.”

Later on in the day, after the article was published, Daphne Caruana Galizia published the news that the minister also held a company in the secretive jurisdiction of Panama.

25 February 2016 – In the midst of these revelations, Minister Mizzi was elected Labour Party Deputy Leader, a position which was short-lived. The press conference held that evening marked the start of the minister’s defensive stance over the Panama issue, and the beginning of the bombardment of Panama-related questions the minister faces to this very day.

26 February 2016 – Prime Minister Joseph Muscat stood by his embattled minister, stating that no wrongdoing had taken place. Asked whether Dr Mizzi should publish his ministerial declaration of assets immediately, Dr Muscat said that it would be published by the end of March like that of all other ministers. Turning to whether Dr Muscat supported investment by private citizens in countries such as Panama, he avoided the question by stating that Dr Mizzi was within his rights as long as all is declared.

27 February 2016 – Daphne Caruana Galizia revealed for the first time that Chief of Staff in the Office of the Prime Minister Keith Schembri also has a company in Panama, and uses the same structure as Minister Konrad Mizzi. This now meant that the two people closest to Prime Minister Muscat had companies in Panama, which were placed in trusts based in New Zealand.

On the same day, Minister Konrad Mizzi showed journalists documents pertaining to his trust and Panamanian company saying that he will take the “unprecedented” step of asking the Commissioner for Inland Revenue to audit his financial affairs.So far, nothing is known what happened to this supposed audit.

6 March 2016 – Thousands of people took to the streets of Valletta in protest against what the Opposition dubbed ‘a crisis of corruption’ in the wake of revelations that Minister Mizzi and the Prime Minister’s chief of staff Keith Schembri hold offshore companies in Panama.

11 March 2016 – It was reported that large bags filled with papers were removed from Nexia BT’s offices. Nexia BT, i.e. Nexia Brian Tonna, was Konrad Mizzi and Keith Schembri’s adviser, and dealt with Mossack Fonseca on behalf of its clients.

3 April 2016 – The Panama Papers basic database is made available to the public. In an article on the ICIJ website, documents reveal how associates of Russian President Vladimir Putin secretly transferred as much as $2 billion through banks and shadow companies and provide details of the hidden financial dealings of 128 more politicians and public officials around the world.

The cache of 11.5 million records showed how a global industry of law firms and big banks sell financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars.

8 April 2016 – The Malta Independent reveals that Brian Tonna – the man behind Nexia BT, the company that had advised Energy and Health Minister Konrad Mizzi on the establishment of his Panamanian company and New Zealand trust – was also the sole shareholder of Mossack Fonseca & Co. (Malta) Ltd, through his company BT International.

10 April 2016 – The second national protest against corruption is held. Opposition Leader Simon Busuttil said that the Prime Minister has lost the moral authority to govern the country. The Prime Minister addressing a Labour Party conference slammed the PN’s Cedoli scheme.

On the same day, The Malta Independent on Sunday revealed that Mossack Fonseca, aside from handling Minister Konrad Mizzi’s company, also handled the affairs of the parent company of former Delimara power station lead partner Gasol, African Gas Development Corporation Ltd.

18 April 2016 – Government defeated a motion of no confidence presented by the Nationalist Party, with 38 MPs voting against and 31 in favour. The government's counter motion of confidence was passed with 38 in favour and 31 against. In a 13-hour session, Parliament debated the vote of no confidence brought forward by the Opposition following Prime Minister Joseph Muscat's inaction over the Panama Papers scandal.

27 April 2016 – Police Commissioner Michael Cassar resigns from his position. On the same day, Minister Konrad Mizzi was reported as having filed his declaration of assets in February 2016, which lists his Panama company.

28 April 2016 – Konrad Mizzi has his health and energy portfolios removed. However, he remains heavily involved in the energy sector to this day, resulting in doubts that the Prime Minister took any actual action against him because of the Panama Papers. It was also announced that he would step down from the post of PL Deputy Leader. No action was taken against Keith Schembri.

4 May 2016 – A five-hour parliamentary debate on Independent MP Marlene Farrugia’s motion of no confidence in now Minister without Portfolio in the Office of the Prime Minister Konrad Mizzi was defeated in Parliament, with 31 MPs voting in favour and 36 against. Dr Mizzi abstained from voting. The debate was characterised by Opposition MPs speaking about the failures of the minister, while government MPs defended the government's achievements.

9 May 2016 – The International Consortium of Investigative Journalists publishes a searchable database that strips away the secrecy of nearly 214,000 offshore entities created in 21 jurisdictions, from Nevada to Hong Kong and the British Virgin Islands. The data, known as the Panama Papers, is the largest ever release of information about offshore companies and the people behind them. This includes, when available, the names of the real owners of those opaque structures.

Seven hundred and fourteen companies linked to Malta were listed on the Panama Papers database.

15 May 2016 – The Malta Independent on Sunday releases the first article from the Panama Papers soon after becoming partners with the International Consortium of International Journalists, gaining access to the leaked emails and documents from Mossack Fonseca. This newsroom revealed documents which showed that OPM Chief of Staff Keith Schembri had made a USD725,000 fixed asset investment in his British Virgin Islands company back in 2014. This newspaper is still in the middle of libel proceedings instituted by Mr Schembri over the story

20 May 2016 – The Malta Independent reveals thatthe Cypriot company, A2Z Consulta, is owned jointly by three British Virgin Island offshore companies owned by Keith Schembri, Businessman Pierre Sladden and former Allied Newspapers Limited Managing Director Adrian Hillman. Mr Hillman left his post after an inquiry was launched into alleged editorial interference. Blogger Daphne Caruana Galizia alleged that Mr Hillman may have received bribes from Keith Schembri after it was ascertained that he held a secret company in the British Virgin Islands. Mr Hillman and Allied Newspapers reached an agreement earlier this year, concerning"any claims they have or may have had against each other. As a result, all litigation was withdrawn".

11 June 2016 – Chris Cardona was elected PL Deputy Leader for Party Affairs in Dr Mizzi’s stead, beating Owen Bonnici. Cardona obtained 53.4% of the vote, against Bonnici’s 46.6%. None of the candidates had reached the required quota in the first round.

2 August 2016 –Manfred Galdes, Director of Financial Intelligence Analysis Unit (FIAU), resigns. It was later discovered that he had led an FIAU investigation regarding the Panama Papers that had been given to the police for follow up in April but no action had been taken.

20 February 2017 – The European Parliament’s PANA Committee conducted a fact-finding mission in Malta. This mission was designed to take place with the full cooperation of the national legislators in order to discuss and scrutinise the effective implementation and enforcement of Union law as specified in the PANA Committee's mandate. While Minister Mizzi did attend, the Chairman of the Committee told this newsroom that the whole situation did look a bit like money laundering. Keith Schembri refused to appear before the committee.

On the same day, Konrad Mizzi published the ‘independent audit’ he commissioned, which was signed off by Crowe Horwath New Zealand Audit Partnership on 21 September 2016, even though Prime Minister Joseph Muscat, on 7 October, had still been describing the audit as “a work in progress”.

19 April 2017 – It was alleged that a company owned by Leyla Aliyeva, one of the two daughters of Ilham Aliyev, ruler of Azerbaijan, transferred sums of money, described as “loan payments”, to Hearnville Inc, Tillgate Inc and Egrant Inc last year. The company, which is incorporated in Dubai’s free zone, is called Al Sahra FZCO, and Ms Aliyeva is allegedly the ultimate beneficial owner.

20 April 2017 – Daphne Caruana Galizia declares that documents proving Michelle Muscat owns Egrant, a third Panamanian company set up in tandem with those of Dr Mizzi and Mr Schembri, are held at Pilatus Bank in Ta’ Xbiex. On the same evening, the Pilatus bank chairman and his colleague are seen leaving the bank, carrying luggage and a briefcase, prior to a magisterial inquiry being called later that night.

21 April 2017 – Journalist and blogger Daphne Caruana Galizia uploaded a text on her website which she claimed to be the declarations of trust showing that shares in Egrant Inc (a company also set up in Panama) are held by Mossack Fonseca nominees for “Mrs Michelle Muscat”, also providing her date of birth, 16/05/1974 and other personal details.

On the same day, Magistrate Aaron Bugeja started his inquiry into the allegations made by Mrs Caruana Galizia, which the Prime Minister had asked the police commissioner to request. Magistrate Bugeja was seen entering the Pilatus Bank offices in Ta’ Xbiex the next morning. Pilatus Bank also released a statement declaring that no member of Prime Minister Joseph Muscat’s family ever held an account with Pilatus Bank, nor did Hearnville Inc., (owned by Dr Mizzi), Tillgate Inc., (owned by Mr Schembri) and Egrant Inc.

23 April 2017 – Opposition Leader Simon Busuttil called on the President of the Republic to intervene in what he termed as a constitutional crisis, and called on Prime Minister Joseph Muscat to resign. Dr Busuttil's call came during a speech in Valletta during a protest against corruptions following the allegations that the Prime Minister's wife Michelle is the ultimate beneficial owner of the company Egrant, which was opened in Panama. The Prime Minister continues to refute the allegations.

25 April 2017 – Opposition Leader Simon Busuttil claims that Nexia BT's Brian Tonna received payments from three Russians for the sale of citizenship, which he then transferred to OPM Chief of Staff Keith Schembri. He said he has proof and that he would go and testify before the magistrate. He also called for the Prime Minister’s resignation, and the immediate arrest of Keith Schembri. He appeared before the magistrate the next day and presented his evidence.